January 17, 2005

Archived - Opening Remarks by Paul Boothe, G-7 Deputy of Canada, on Behalf of the Honourable Ralph Goodale, Minister of Finance of Canada, at the Commission for Africa Meeting, Cape Town, South Africa

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Check Against Delivery


Good morning everyone. First, let me send my greetings and good wishes from Canada, and my regrets for not being able to be with you in person. However, I was able to participate in a productive discussion with Minister Manuel, South African Finance Minister, and Chancellor Brown, UK Chancellor of the Exchequer, yesterday and share with them some of my views.

I am pleased to be able to present my remarks to you, which will also be conveyed by my personal representative, Paul Boothe, G-7 Deputy of Canada.

Over the past few weeks the world has witnessed an unspeakable tragedy in the countries surrounding the Indian Ocean. We have also seen an unprecedented response to the humanitarian and reconstruction needs of those faced with the aftermath of December's tsunamis. Canadians, like so many others, have been heavily engaged.

This outpouring of global concern is a sign of great hope for the world. Yet, as many have stressed, we must not allow the tragic events of that disaster to divert us from the challenges the African people have endured long before December 26-challenges that will endure long after.

I encourage everyone here today to work together and overcome those challenges-by turning them into opportunities for a brighter future for this continent. Today we want to hear your views on the priorities and solutions for Africa.

Building on Our Achievements

Many of you in this room represent NEPAD (the New Partnership for Africa's Development), one of the most significant steps Africa has made to take the lead on its own development issues. NEPAD took ownership of governance, recognizing its fundamental importance in every country, and without which development cannot go forward.

At Kananaskis in Canada in the summer of 2002, the G8 community responded to the call that NEPAD put forward to us by signing on to the G8 Africa Action Plan. The progress we made on this plan during the Canadian G8 year simply must continue at Gleneagles and beyond.

The Commission for Africa is trying to re-emphasize Africa on the international agenda and build on the momentum that started with NEPAD and the Africa Action Plan.

Canada will work with you, and our involvement in this Commission is just one example. I would like to share with you what I have learned to date. Last August 2004 I visited South Africa, Mali, Tanzania and Nigeria, and met with a range of African political leaders, some of whom are here today-plus business leaders, local entrepreneurs, civil society, donors and academics.

Last fall I travelled across Canada to consult with Canadian NGOs (non-governmental organizations) and entrepreneurs active in Africa.

Private Sector Development and the Link to Poverty Reduction

Since I joined the Commission I've been asking myself the same questions asked by our Prime Minister Paul Martin and former Mexican President Ernesto Zedillo in their recent report:

I will start with the issue we heard most about: a lack of high-quality public infrastructure. In my African consultations, transportation was most often raised, as were constraints in the areas of communications, energy and water supplies. Together, these are the building blocks for a modern economy with a thriving entrepreneurial sector and an empowered citizenry.

Second, I heard a lot about the need to stimulate the success of indigenous enterprise and family farms-through capacity building, technology and access to finance-and the need to improve export readiness.

These issues resonated strongly with me, partly because of my upbringing in Saskatchewan, the farming heartland of Canada, and also because they are issues covered in the Martin-Zedillo report.

We must highlight the significant role of micro, small and medium enterprises in African economies. More comprehensive approaches that facilitate financial and non-financial services and the business environment together, rather than in silos, may be the way forward.

We also must highlight the important role of women as micro-entrepreneurs and the gender equity implications of any chosen approach.

Third, the role of foreign firms was constantly on the minds of the Africans with whom I met. Foreign involvement and investment need to be attracted on terms that are both economically sensible to them and measurably beneficial to Africa. We need to capitalize on the growing sense of the importance of environmental and social issues in international business affairs, as we unleash the potential of private sector firms to get more involved in Africa. Beyond the "barriers of business," corporations need to undertake community development projects and help to build resilient local economies. Some, like Canada's Nexen Corporation, are already playing this role.

There is much that needs to be done from the donor side in terms of structures of global public policy like Doha, but in the interim, helping Africa address its export readiness capacity, including access to capital and skills, is another fundamental area for action.

Two Key Burdens

We have reason to be hopeful. But while there are many ways in which we can promote private sector development itself, we must first overcome two key obstacles.

First is the burden of debt.

Concerns about ongoing high debt levels were raised at nearly every meeting I had while in Africa. Too many resources are diverted into debt service when they could have gone to public investment to prompt stronger economic growth and social development, and a better quality of life.

Although the HIPC (the Heavily Indebted Poor Countries Initiative) is reducing debt burdens by two-thirds, it still has left eight countries that have completed the process with significant debt service obligations. This is not good enough.

Many Africans told us that although they have taken the tough decisions needed to reform their economies, neither the HIPC process itself, nor donors' efforts more generally, have been commensurate.

I agree that more is needed.

We need to build on Chancellor Brown's proposal on debt, and ensure that the IMF (International Monetary Fund) is brought into any new initiative.

What is key is to respect some core principles, namely additionality, equity, IFI (international financial institution) financial integrity and proper incentives. This issue, without a doubt, will be discussed in detail at the Gleneagles summit. Canada has been a leader in the field of debt relief and we will continue to play that role.

I am happy to tell you that, in recognition of Madagascar reaching its HIPC completion point, I am today announcing relief of $21 million of Canadian bilateral debt for that country. We salute Madagascar.

A second key problem is the burden of disease.

In addition to its intrinsic value, the area of better health and fighting communicable diseases has a strong economic link.

Global estimates suggest increased health investments translate into billions of dollars per year of increased resources in low-income countries.

In all my consultations both in Africa and Canada, the ongoing health crisis in Africa, particularly in regards to the HIV/AIDS pandemic, was highlighted as an immediate priority. Therefore, we should consider the proposal put forth by Chancellor Brown to combat HIV/AIDS.

Skills shortages and capacity issues were also frequently raised-one cannot but make a clear link to disease.

Private companies know only too well that addressing issues such as HIV/AIDS is not purely a moral responsibility; it is also about good business sense.

I believe we should set our sights on outlining a comprehensive solution to the crisis of infectious diseases in Africa. The returns on investments in this area are enormous, and can also build broader capacity in the health system.

Targeted efforts to frontload aid, like the International Financing Facility for Immunization, are also worthy of a closer look.

Given the immediacy of the needs on health, I feel that it is timely to announce a key Canadian initiative.

We need to finish the job on polio eradication, a disease that hits Africa harder than any other continent.

Today I will announce that Canada will fund the immediate shortfall faced by the Global Polio Eradication Initiative, providing C$42 million to help finally eradicate this crippling disease.We look forward, hopefully, to a future where no child is left paralyzed by polio.

Conclusion

In conclusion, let me reiterate Canada's commitment to Africa, and the importance of the CFA (Commission for Africa) process to help fulfill that commitment.

Thank you for giving me the opportunity to share with you some of my thoughts. I wish you a very successful discussion and look forward to hearing the feedback of my Canadian delegation as we continue to work on the final report of Mr. Blair's Commission for Africa.